State capture: We will end up like Zim

A few months after he was appointed Reserve Bank governor, Lesetja Kganyago invited editors for a round-table discussion on domestic and global economic matters. I was privileged to take part.

He shared a story of how he had to rework his expansive signature to fit on bank notes. Several signature samples had to be taken and checked against the required standard designs.

The exercise was repeated a few times until the perfect signature fit was found. If you check your notes in your wallet, you will find a signature that is compliant with the rules of the bank.

The moral of the story is that no one is above the rules of state institutions. The fact that Kganyago is a governor doesn’t make him immune from the rules of the bank.

From what appears to be a mundane signature exercise to being compliant with the constitutional obligation protect the value of the rand, no rule is insignificant for the governor. And no rule should.

In a modern democracy the rules governing the political system and the political system are regarded as legitimate. There is no reason for noncompliance, especially by those who are supposed to lead by example. But rules are updated from time to time to ensure that they keep up with developments.

In South Africa we have rogue elites that want to change the banking and financial regulations for their selfish interests. In the process of destroying rules and attempting to establish a lawless society, they rob citizens of the opportunity to enjoy the new democratic order.

South Africa’s first post-apartheid Chief Justice, Ismail Mahomed, well-known in legal circles for his brilliant use of language, captured the significance of the democratic order. In 1996, while speaking about the transition to democracy, he observed: “Now is the romance of having defeated evil. This kind of excitement arises only once in the life of a nation. We must not let it die.”

Two decades later, many South Africans are not sure whether to laugh or cry when they evaluate the state of the nation or the state of the country’s leadership. Constitutional democracy is in place, but the rules that underpin it are under threat from a new evil.

This new evil is in the form of a romance that is the exclusive preserve of a few. It’s a romance between a rogue business elite and a dodgy political elite. What turns them on is corruption.

They have privatised the national excitement that Mohamed so affectionately referred to. As citizens toss and turn at night worrying about the country and its economy, the rogues are having fun. Their insatiable appetite for public money is numbing.

If the late American psychologist Abraham Maslow were to rise from the dead to draw up a new hierarchy of needs, corruption will be a key part of self-actualisation of the rogue elites.

These elites are at war with state institutions that threaten to disturb their romance. Take the ongoing fight by the rogue elites for the control of the National Treasury and the attempts to weaken the South African Reserve Bank, for example. The rogue elites don’t care that these institutions were established by the constitution. Anyway, they see the constitution as a stumbling block to efficient looting.

We only have to look at Zimbabwe for what happens when institutions like the treasury and the central bank are weakened and repurposed to serve elites that get turned on by corruption. Zimbabwe is broke. It can hardly afford to pay civil servants their salaries. It doesn’t have a currency.

Zimbawe’s economic collapse should scare us all. It should serve as a wake-up call. There was a time when the Zimbabwean economy was big and intractably linked with South Africa’s. Whenever economic policy changes were mooted in Zimbabwe the rand would react. But not anymore.

Robert Mugabe used to think of himself as the most prominent leader in Southern Africa. Now he has no political clout to speak of.

Only his Zanu-PF cronies take him seriously because he runs the country’s brief case that contains whatever little is left of the ruins that he himself caused. No amount of tired anti-imperialist rhetoric has helped him to generate wealth for Zimbabweans.

Economic growth needs strong institutions that serve the nation. Institutions work well when they are led by strong leaders. And strong leaders are those who respect the rules.

In Zimbabwe the strong leaders lost to the Mugabe-led rogues who transformed state institutions by tempering with the rules for short-term gain.

South Africa’s Treasury and the South African Reserve Bank have so far managed to repel the rogue elites because for years they were run by people who respect rules.

How one wishes the South African executive (cabinet) can respect its own rules.

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